30% of Luxury Sales Vacation Homes
Nearly one-in-three luxury home sales in Las Vegas (30%) are vacation homes, according to a recently released survey by Windermere real estate. High rise luxury condominiums, including developments like the Trump Tower and the Palms Hotel near the Strip are dominated by vacation home owners seeking the high life.
Their towering developments represent much of the best Las Vegas has to offer. An over-whelming majority or 82.8% of condo sales made in the high end market were non-owner occupied sales in the past decade, with a huge 70.2% of those being all cash sales to affluent buyers. They are among the 40-million tourists visiting Sin City in 2014, who come to Las Vegas for warmer weather, gambling, games of chance and entertainment.
Most luxury buyers are baby boomers, with the majority being empty-nesters who’ve worked to reach financial freedom and enjoy the comforts of their efforts. Boomers are downsizing and enjoy making their own decisions about their lifestyle choices.
Millions of boomers have learned from their own mistakes and their parents mistakes in the real estate collapse, and recognize Las Vegas as a strongly recovering real estate market with a promising future.
A Luxury Portfolio International study determined 21% of young affluent buyers purchased a primary home in the past three years in the U.S. following the collapse compared to only 9% of those 50 years and older. Baby boomers outnumber Generations X and Y buying homes higher than $500,000.
Sales peaked in the Las Vegas luxury market in 2005 and 2006 before bottoming in 2011 and 2012. The moderate luxury market is considered between $500,00 and $1.5-million, while the ultra luxury market is currently considered to be $3-million and above.
The luxury market is in the beginning stages of recovery, anchored by near record low mortgage rates and record highs on Wall Street, where many luxury buyers invest their funds to purchase real estate in cash. Since the Dow Jones Industrial Average has reached nearly 18,000, a new record high, many boomers are expected to pull their funds out of the market to buy real estate.
Las Vegas luxury vacation homes are greatly driven by Nevada residents, who are moving up and Californians cashing out and buying a luxury home for a much lower price than in the Golden State. Nevadans compose about half of luxury home buyers in Las Vegas. Californians account for about a fifth.